Is Personal Injury Protection (PIP) Required?

Drivers in Arlington, Grand Prairie, Mansfield, Duncanville, De Soto, Flower Mound, Haslet, Benbrook, Saginaw, Newark, Crowley, Dallas, Fort Worth, and other places may ask the above question. Like most questions that are legal in nature, the answer is: It depends? Look at this case for guidance.
In 2003, the Austin Court of Appeals decided the case Taylor v. State Farm Lloyds, Inc. Here are the relevant facts in this case. Taylor purchased multi-peril insurance for her business from State Farm in 1993. At that time, multi-peril insurance policies were promulgated by the Texas Department of Insurance (TDI). Within that policy, State Farm offered limited non-owned auto liability insurance. Taylor purchased hired auto liability insurance as an endorsement to her multi-peril policy. In 1996, TDI allowed State Farm to write its own multi-peril auto policy subject to TDI’s approval. At that time, State Farm issued hired and non-owned auto liability coverage as an endorsement to Taylor’s multi-peril policy. None of the hired and non-owned auto liability coverage State Farm issued included PIP or UM/UIM coverage. Taylor contends that State Farm was required to issue PIP and UM/UIM coverage. State Farm rejoins that TDI has the authority to regulate certain auto insurance by other provisions of the insurance code when TDI determines that it is appropriate. State Farm further asserts that TDI has chosen to regulate hired and non-owned auto coverage under the multi-peril subchapter of the insurance code rather than the auto liability subchapter, and therefore, PIP and UM/UIM coverages are not mandatory with regard to the hired and non-owned auto liability insurance that forms a limited part of the multi-peril insurance Taylor purchased for her business.
The issue for the court was whether PIP and UM/UIM coverage is mandatory when an endorsement for hired and non-owned auto liability is added to a business’s multi-peril insurance policy.
In this case, Taylor claims State Farm violated what is now, Texas Insurance Code Section 1952.152(b), the PIP statute, and Section 1952.101(c), the UM/UIM statute. In this case the court decided that State Farm did not violate the above statutes. Their reasoning was that hired and non-owned auto liability insurance is distinguishable from “auto liability insurance” and therefore State Farm was not subject to the above provisions.
The Insurance Code clearly states in the above cited statutes that PIP and UM/UIM coverge is to be provided in auto liability policies. However, another part of the insurance code stated: There shall be excluded from regulation under the provisions of this subchapter any insurance against liability for damages arising out of the ownership, operation, maintenance or use of or against loss of or damage to motor vehicles … which may, in the judgment of the Board, be a type or class of insurance which is also the subject of or may be properly regulated under the terms or provisions of other insurance rating laws … If such a situation shall be found to exist, the Board shall make an order declaring which of said rating laws shall be applicable …
The court then stated, “Taking the provisions together and noting their relative placements within the subchapter dealing with automobile insurance, it is clear that the article grants TDI the discretion to except some kinds of auto insurance from subchapter A’s mandatory PIP and UM/UIM coverage.
The relevance of this case is in showing that there are a few exceptions to whether or not insurance dealing with automobiles is required to provide PIP and UM/UIM coverage. The general rule and answer is absolutely – Yes. But it appears there are a few exceptions.
The final advice – consult with an experienced Insurance Law Attorney to clear up doubts.